The telecom brand battle is going to get tougher. Here's why

At a cricket match in Mumbai in the ongoing Indian Premier League, where Vodafone is one of the official partners, Reliance Jio pulled off what could be called an ‘ambush marketing’ stunt to grab eyeballs. The telco got a large bunch of folks dressed in T-shirts emblazoned with its brand to sit together in the stands and create a larger-than-life Jio brand wave.

Recently, Jio complained to the advertising regulator about what it said was a misleading campaign by market leader Bharti Airtel, which claimed it had the fastest network. Earlier this year, Idea Cellular took a dig at Jio’s free data offers in a TV commercial campaign loaded with sarcasm, which some brand experts called a classic case of potshot advertising.

These are examples of the ongoing battle of brands between India’s top telcos on one side and newcomer Jio on the other, which experts said is even more critical than their price war as the carriers seek to attract and retain subscribers and protect revenue market share. The rivalry escalated ever since Jio launched in September with two back-to-back promotional offers of free voice and data.

The tussle will only get nastier with spending on advertising and marketing likely to rise 12-13% this financial year, said Anita Nayyar, CEO for India and South Asia at Havas Media Group. The industry may splurge about Rs 2,000 crore on branding and marketing-related activities in calendar 2017 alone, she said.

Top mobile phone companies will continue to engage in full-blown brand clashes by taking recourse to “mother-of-all-bombs kind of advertising, unlike the polite cola wars of yore”, said brands strategy specialist Harish Bijoor.

The stakes are huge since “telecom services penetrate possibly as much as branded salt does in the country if not more”, said Bijoor, adding that telcos have little else to fight with except their image plays. He said branding strategy is assuming a far greater importance in the overall corporate strategy in FY18 as telcos attempt to distinguish offerings amid a commodity clutter.

Shashi Sinha, CEO at IPG Mediabrands India, expects “aggregate telco branding and advertising spends to easily increase by over 10% in FY18” as the companies set aside more than the benchmark 2% to 4% of sales revenue for advertising and brand-related spending.

Airtel’s sales and marketing expenses in the quarter ended December were Rs 1,871.5 crore. Idea Cellular spent about Rs 948 crore on subscriber acquisition and servicing and advertising and business promotion in the quarter. Branding, advertising and business promotion expenses are a subset of these cost items and are not disclosed.

Vodafone India “revises marketing budgets based on the competitive scenario and when it feels the need to communicate key propositions to customers”, said Siddharth Banerjee, EVP-marketing, declining to share details.

Airtel, third-largest carrier Idea Cellular and Jio did not respond to ET’s queries on a possible acceleration in their brand-related expenditure in FY18. Even as brand spending is poised to increase, the impact may be determined by the content and the target audience.

According to Future Brands managing director Santosh Desai, any branding strategy purely revolving around accusations and counter-accusations is seldom effective in the long run. Consumers are largely “indifferent to corporate slanging matches on the advertising/branding front and look out instead for a radical change in quality of services”, he said.

While Desai expects telcos to step up branding and advertising activities in FY18, he sees them being more focused on differentiating their customer services.

Customer services, he said, “is a variable that is, typically, underleveraged in that it has not received the kind of attention from the top telcos that it deserves”.